Last Friday, a group of US Senators led by Senator Tom Udall (D-NM) and Senator Barrasso (R-WY) introduced S.2440, a bill to expand and extend the BLM pilot program created under the 2005 Energy Policy Act. The pilot program is set to expire in 2015 and New Mexico has two pilot offices which strive to have a multi-disciplinary approach to permitting.
In order to fund the increased staffing the BLM claims it needs, S.2440 will increase the permitting fee from the current $6,500 to $9,500. (Although I am told the fee is going up to $7,500 for 2015 anyway.) The $9,500 level would be set for 11 years starting in 2016 and could not be changed by the BLM through rule making although it is set to the consumer price index. According to Senator Udall’s staff, if the current provisions of the pilot program expire and the BLM were to do a rule making to set the APD fee, it would be minimum $11,000 per application.
In addition, S.2440 requires that from 2016 through FY 2019 that 15% of the bonus fees collected at the NM lease sales would have to stay with the NM BLM to assist with permitting needs. From 2020 to 2026 100% of the fee would go to the BLM Processing Improvement Fund for the agency to draw from for permitting costs. (Note that additional costs industry currently pays such as ‘rights-of way’ fees, air permitting fees to the BLM do not go into this fund and this fund can only be used for processing Applications for Permits to Drill.
The bill will also allow the secretary to designate new project offices anywhere in the US and does not limit funding for pilot offices just to offices in NM, WY, MT, CO, or UT as does the current law. S. 2440 adjusts the interest rate that industry receives on overpayment of oil and gas royalties from 3 percentage points over the Federal short term rate to 1 point over that rate. Note that the underpayment of royalty penalty is still 3 points over the Federal short term rate. The bill was referred to the Committee on Energy and Natural Resources. S. 2440 is co-sponsored by Sens. Martin Heinrich (D-N.M.); Heidi Heitkamp (D-N.D.); John Hoeven (R-N.D.); Mike Enzi (R-WY); Mark Udall (D-CO); Dean Heller (R-NV); John Walsh (D-MT); and James Inhofe (R-OK).
A copy of the pre-filed legislation is linked here.
